How to nail a government grant application

Malcolm Donnell is an adviser with Accelerating Commercialisation, the Federal Government’s Entrepreneur’s grants program. Accelerating Commercialisation provides businesses with access to expert advice and matched funding of up to $1 million to help take novel products, processes and services to market.

What is your key advice for entrepreneurs applying to the Accelerating Commercialisation program?

Grant programs are typically looking to back long term sustainable businesses. Accelerating Commercialisation is also about building the innovation ecosystem in Australia; by assisting more companies to become successful a number of those entrepreneurs will be in a position to give back in the future as investors, mentors and role models.

On the other hand, investors, such as VCs, are looking for a significant return on investment, which typically means the opportunity needs to be more than just a long term sustainable business, needs to be high growth and needs to have an exit opportunity. VCs invest in around 0.5 percent of the companies they see, which can be compared to around five percent of the companies that approach Accelerating Commercialisation being offered grants.

Government grants usually require evidence of matching funding from another source, for example from the founders, other investors, pilot customers or profits from other parts of the business. Applicants to Accelerating Commercialisation also need to present a case for why it would be unreasonable to expect the company to source the additional funding from elsewhere.

Companies that get funded by our program also need to demonstrate the national benefit of the business through increased export revenues, employment, taxes, and investment capital. You’ll get a few extra national benefit points for being in growth sectors such as mining, food and agribusiness, oil, gas and energy, advanced manufacturing, and medical technologies and pharmaceuticals.

With Government grant programs there are some fixed eligibility criteria, and criteria that are locked into policy. A grant applicant that doesn’t meet the criterial won’t get through. Make sure you read the application form carefully and answer all the questions. You’d be surprised how many people gloss over sections or leave out full answers.

Eligible applications are allocated to a commercialisation adviser. Commercialisation advisers are all very experienced and know the investment committee’s hot spots. Absolutely listen to your commercialisation adviser as it will significantly improve your application as well as how you pitch your business to other organisations.

What distinguishes Accelerating Commercialisation from other grants programs?

Accelerating Commercialisation is about assisting companies that have access to Intellectual Property (IP) and the activities that they need to undertake to launch into the market. A core starting point is therefore the IP and explaining why it will be difficult for any competitors to be able to replicate the IP.

The IP could be protected by a patent or could be difficult to replicate as complex algorithms are hidden in backend software code. The key is being able to clearly and concisely convey the underlying uniqueness and complexity of the IP and why it will be so hard for competitors to replicate.

With a strong IP position in place, the key criteria for an investment pitch and an Accelerating Commercialisation grant are similar: the market opportunity, the value proposition, that there is a clear execution plan in place and the management team. Being a Government program there is also the additional national benefit criteria for an Accelerating Commercialisation grant.

For the larger grant sizes, up to $1 million, the applicants need to be strong across all the criteria to be competitive. For smaller grant sizes (around $100,000) there may be some gaps in the criteria, for example, you may not have a full management team in place, however, you need to know where the gaps are and have a plan to close those gaps.

Evidence of demand from the market is critical to any competitive application, no matter what size grant you are applying for. You may think it is a good idea, but if the market doesn’t think so, it won’t fly. It needs to be something the market is prepared to spend money on.

Do you have any tips for those businesses looking to do something completely new and can’t prove the market?

With something so new and innovative it can be tricky. Talk to customers, talk to distribution/channel partners, really find someone who will help you demonstrate that there’s a market need for your product. It can be powerful to show that you’re connected with a corporate that has a deep problem and they see that you have a potential solution. If the corporate is prepared to put in significant effort at the early stage of the process that will give your application a lot of weight.